US exports record corn shipments to EU as tariffs cast shadow on market outlook

US corn finds itself at a critical crossroads as exports to the EU hit their highest levels in a decade and the industry faces the uncertainty of tariff disputes.

The US exported 2.7 million mt of corn to the EU as of March 6, or week 27 of marketing year 2024-25 (September to August), according to US Department of Agriculture data released March 13.

The volume is more than 87 times what the US exported during the same 27 weeks of MY 2023-24, when USDA data showed 30,981 mt of US corn shipped to the EU.

"The EU has already imported a record amount of US corn this marketing year as poor Ukrainian production in 24/25 has allowed US corn to be a competitive origin," said Mary Kate Porath, a corn analyst at S&P Global Commodity Insights.

High quality, low price

US corn's quality has helped it compete with Ukrainian corn, and exchange rates have given it an edge over Brazilian corn, said a Spain-based source.

Platts, part of S&P Global Commodity Insights, assessed corn FOB-Gulf at $210.73/bushel on March 13, down 0.6% from Jan. 2. FOB Santos prices rose 6.6% over the same period to $212/bu.

The EU is the fourth-largest destination for US corn so far in MY 2024-25, accounting for 9% of exports, trailing only Mexico, Japan and Colombia. According to USDA data, the EU's share did not previously exceed 1% in the last decade.

Tariff uncertainties

On March 12, the EU launched countermeasures in the form of tariffs against imports from the US, in response to the new 25% tariffs on European steel and aluminum imposed by the US. The European Commission will allow the current countermeasures against the US from 2018 and 2020, valued at $28 billion worth of US goods, including corn, to expire on April 1.

"So that is not a good scenario," said David Weiner, risk manager at Cargill, during the Cargill Elevate podcast on March 12.

Nevertheless, Porath noted that Commodity Insights still forecasts a minor volume of US corn to the EU for the remainder of MY 2024-25, even with tariffs.

"However, the volume could easily find another destination should the EU turn exclusively to Ukrainian origin," Porath said.

The Spanish trader said a decrease in corn demand is expected as a result of lower-priced wheat being sought for cheese production.

"We find ourselves uncertain about how to proceed with this situation," the trader said. "We anticipated that the prices of logical alternatives, such as Brazilian and Ukrainian corn, would increase, but that has not materialized."

Tariffs on US corn open the door for Brazil to repeat the story of 2018 when China imposed tariffs, said Joana Colussi, an agricultural economics instructor and researcher at the University of Illinois Urbana-Champaign.

"These tariffs could open a new window to Brazil. Remember 2018, when the trade war started? Brazil was not important. China opened its market to Brazil, and now Brazil has the opportunity to repeat the story and to have more room," Colussi said March 13 during the webinar South America's Crop Season Update: Soybeans, Corn, and Export Markets.